China is in better shape than its critics make out

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The Chinese state holds most of the cards when it comes to the debt burden, so would need to be particularly inept to turn it into a crisisCredit:
China is in better shape than its critics make out /Reuters

The worriers are back warning us that China has borrowed too much. If China was assessed by the same standards as the advanced world, they would be taking a different view. In China state debt is only around 40pc of GDP, compared to six times that amount in neighbouring Japan.

The hostile commentators look at a much wider figure for China, the total borrowings of the state and the private sectors combined. On this measure China has borrowings around 250pc of GDP. This is not excessive by world standards.

In China, household debt at 40pc of GDP is low in comparison to most Western countries. It is also offset by substantial household savings, and a tradition of low mortgage commitments relative...